Risk can be the difference between a business growing and stagnating. The three major retail administrations we’ve seen already this year show the dangers of playing it safe.
Legendary marketing figure Seth Godin talked to Marketing Week earlier this month about his theory advocating brands taking more risk in business to ensure longevity and success.
His latest book, The Icarus Deception, named after the mythological winged character that flew too close to the sun, is about taking opportunities that can come from it. Basically, the benefits that come from doing risky things often outweigh the losses.
I’ve been watching the ITV series Mr Selfridge - I’m persevering despite the clunky dialogue - and what I like about it is the way that Selfridge approached business. He had balls. His plan was ambitious, most people thought he could never pull of what he was hoping to achieve, but he took the risk anyway.
And now look at Selfridges. A globally renowned brand and one of the most luxurious shopping experiences there is.
Selfridge was, essentially, a marketer. He was creating the story of a brand and giving people a reason to trust in it. Had he listened to the doubters, weighed up the risks and decided it was too much of a gamble it’s highly unlikely that Selfridge would have built the business and the brand that he did.
In the same light, I recently had a conversation with a creative agency about brands that take brave decisions with creative work. A client, in a fairly pedestrian market dominated by price promotions is faced with the problem that its brand doesn’t really mean anything when the only message getting though is “buy one get one free”.
A mid-market brand in that situation can chose to play safe and resign itself to the same strategy. If it’s lucky it will maintain its mid-market position and market share, but more likely it will stagnate, gradually drop share and melt into the background.
A really brave brand will take the decision that playing it safe has no benefit but being bold can change everything. No one wins new customers, or impresses existing ones, by doing exactly what they’ve always done.
In the case of the brand we were discussing, the client took the risky move with a bold campaign that was nothing like what anyone would expect from this market. The marketing director was on the line here, but thanks to a little risk, vision and bravery the brand has significantly grown its market share and increased sales.
Being risk-averse is perfectly understandable in a difficult climate but it rarely gets you any big prizes.
The three major retail administrations this year, Jessops, HMV and Blockbusters are all a lesson in this. None of these businesses was quick enough to realise that what they had traditionally done was not going to be enough to ensure success and none took bold, risky enough decisions to get ahead.
The lesson is that if you always do what you’ve always done you will always get what you’ve always got. Do something different and you’ll see some change.